Situation

A subcontractor is hired under a labor hire agreement to support a new main contractor on a large-scale project. After receiving the subcontract agreement, the subcontractor forwards it to their lawyer for review to ensure it meets their business needs and protects their interests. Meanwhile, to keep up with project demands, the subcontractor begins work immediately, expecting the contract review to be completed quickly.

Problem

Three months pass, and the lawyer has yet to review the agreement, despite its basic structure. Because the subcontract remains unsigned, the subcontractor is unable to submit a progress claim and secure payments for the work they’ve completed. As a result, they are carrying a negative cash flow of approximately $200,000, straining their financial stability and putting project completion at risk.

Outcome Without Commercial Mate

Without a dedicated commercial support system, the subcontractor faces severe cash flow issues due to the unreviewed contract. Without a signed agreement, they are unable to bill for their work, leaving them financially strained and unable to progress effectively. Relying solely on legal counsel for contract review led to delays that impacted both their operations and bottom line.

Outcome With Commercial Mate

Immediate Contract Review Support
With Commercial Mate, the subcontractor could have accessed immediate contract review tools and templates to evaluate the basic terms on their own, identifying any red flags and getting a clear understanding of their obligations without delays.

On-Demand Expert Guidance
With Commercial Mate’s unlimited consultations, the subcontractor could receive quick advice on the contract’s essentials, allowing them to make an informed decision about signing, ensuring they can begin billing for their work promptly.

Cash Flow Tracking and Claims Management
Using Commercial Mate’s cash flow tools, the subcontractor could track project expenses in real time and plan for claims, ensuring they stay on top of finances and avoid the risks of delayed billing.

With Commercial Mate, the subcontractor would have avoided financial strain by securing payment faster and ensuring their contract met project needs from the outset.

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